The deal, which closed in October, values the Bengaluru-based startup at about $40 million, according to two sources aware of the transaction. "They are going after the wholesale business to retail market," said an investor aware of the thinking in the company.

Udaan has hired a team of over 20 people, half of whom have been picked from Flipkart to form a core team who are initially focusing on products in electronics and apparel. The website and mobile application are currently in a beta testing phase. The deal underlines the growing attractiveness of the B2B ecommerce segment, with other companies like Indiamart and OfBusiness also having raised capital this year. Global majors including Amazon and Alibaba have also invested in their B2B commerce operations in India this year. Udaan’s founders --Vaibhav Gupta, Amod Malviya and Sujeet Kumar – left Flipkart in 2016 to set up this venture. Gupta had led functions like product management and finance during his stint there, while Malviya was the chief technology officer. Kumar was a senior operations executive, who ran the logistics unit Ekart and WS Retail, the main seller on Flipkart.

The three founders have also invested $1.5 million in the startup as a part of its seed round. Kumar confirmed the funding round, while declining to comment on valuation. "It’s very rare to have an opportunity to back an experienced team of founders who have worked together for several years at Flipkart," said Bejul Somaia, MD at Lightspeed while confirming the investment.

The market opportunity in B2B commerce is considered larger. According to a Walmart report in 2014, India's B2B e-commerce industry will grow to $700 billion by 2020 from $300 billion in that year. This is certainly much larger than the consumer facing ecommerce industry, which is estimated to reach $103 billion by 2020 including online retail and travel, according to Goldman Sachs.

"Udaan is about making business easy in India, about making B2B commerce convenient and efficient. We believe B2B is the new B2C in India," reads the LinkedIn profile of Malviya.

Both Amazon and Alibaba Group have thousands of local merchants on their platform, helping them sell to the global markets. But these are primarily consumer retail goods, like handicrafts which are easier to ship.